exerpt from Fintronic's interim:BUSINESS REVIEWCombining the...

exerpt from Fintronic's interim:

BUSINESS REVIEW
Combining the expertise of one of our largest shareholders – Customers Asia Limited (“Customers Asia”), and that of our subsidiary – Loten Technology Co., Ltd. (“Loten”), the leading ATM and related services provider in Mainland China, FinTronics reported smooth progress in the development of the its ATM services operation.

During the period under review, FinTronics created the ATM ISO business infrastructure to facilitate implementation of related business strategy and plans. We brought in an industry expert of 30 years’ experience to be the head of our ATM operations in China and to help us achieve our regional sales and ATM deployment targets. We also filled four regional Vice President positions through recruitment and internal transfer. To better manage regional sales, we opened a new office in Shenzhen and another in Shanghai, and moved our Beijing office to a more convenient and cost effective location.

We continued to deploy ATMs in its self-operated network. Having deployed in all 400 devices, the Group now has approximately 10% share of market for Independent ATM Deployer (“IAD”) in China. During the period under review, FinTronics also signed cooperation agreements with the head office as well as regional and local offices of China Unionpay (“CUP”), and won four more contracts with other regional and national banks, securing in all orders for over 7,000 ATMs. In February 2007, FinTronics agreed to dispose of its SI companies at a total consideration of HK$14,330,000, so as to free resources for injecting into its ATM business. Therefore, this segment did not make significant contribution in the period under review.

PROSPECTS
Looking ahead, market demand for ATM devices will remain strong with the authority requiring banks to shorten the waiting time for service by bank customers. The most effective way to achieve that is for banks to provide more self-service points with multi-functional ATMs. As such, the management is optimistic about the prospects of FinTronics and expects it to continue to win new ATM deployment contracts and speed up deployment rate.

With ATM business carrying strong growth potential having become our core business, we are confident of the Group’s ability to deliver improved performance in the second half of 2007. With deployment contracts on hand, we believe we will be able to achieve the target of deploying 1,500 ATMs by the end of 2007. By then, FinTronics will have approximately 20% share of the IAD market. In addition to growing our ATM network, we will continue to work with our partners to boost transaction revenue by providing value-added transactions such as utility bill payment, mobile phone top-up, dispensing of lottery tickets and advertising, etc. on our ATMs.

We will make use of our international industry knowledge and experience to secure more ATM deployment contracts and extend the reach of our ATM network with the objective of becoming the leading ATM and self-service device provider in Mainland China. We are planning to expand our ATM network through organic growth as well as acquisition of existing off-premise ATM networks and smaller ATM ISO companies. Backed by abundant financial resources, the Group is making good progress with its growth plans.
The Group has resolved to acquire 100% interest in Tianjin ATM Company in September. The principal business of Tianjin ATM Company is similar to that of the Group, which includes the procurement, deployment and operation of ATMs, the provision of maintenance and technical support services for ATMs, and the development of value-added services for ATMs in collaboration with commercial banks in the PRC. The acquisition will not only accelerate the Group’s growth in the PRC market, but also offer better operational synergies and economies of scale.

Looking ahead, armed with strong local market knowledge and international ATM operation expertise and technology, we will firmly grasp new opportunities that can allow us to consolidate FinTronics’ leadership in the dynamic and fast-growing ATM market in Mainland China. FinTronics is committed to establishing a top-tier ATM service network and become one of the largest ATM network providers in the next few years. As always, our ultimate goal is to deliver substantial value to our shareholders.